MACCLESFIELD'S plumber-turned-millionaire Paul Davidson could be in hot water - as he faces a financial probe after he bet £5.4m on his own company.

The ingenious designer, nicknamed 'The Plumber' in the city, is a regular dabbler in spread betting, placing huge stakes on the rise and fall of stock shares.

But Paul, 46, who lives in a Prestbury manor house, has the eyes of the Financial Service Authority (FSA) upon him after he placed a spread bet on his own biotechnology company Cyprotex.

Although the bet in itself was legitimate, the FSA are questioning whether it indirectly helped the flotation of Macclesfield-based Cyprotex.

Paul said: "I was shocked and stunned by the reaction to the bet. I wish I had never placed it."

Paul, the biggest shareholder of Cyprotex, bet £5.4m that shares in the company would rise in value after its flotation onto the Alternative Investment Market in February.

The bet was placed through betting firm City Index, who subsequently bought 20pc of Cyprotex's shares to cut their losses if Paul got lucky - called bet hedging.

But this investment in Cyprotex may have helped the firm's successful flotation - and the FSA wonder whether this outcome was pre-determined.

Paul, who lives with wife Karen and children James, 18, and Lauren, 15, found financial fame in 1999 after he invented the revolutionary Oyster Converter pipe fitting, and created Oystertec - a company now worth £82m.

He said the bet was an innocent gamble, having taken legal advice before he placed it. He said lawyers told him the bet was legitimate, adding that he had no idea City Index would hedge the bet.

He said: "I asked City Index if there was anything which said I couldn't bet on a company I owned shares in, and was told to take legal advice."

Paul said: "Spread betting is a bit of fun. I'm not a gambler, I only bet on FTSE-100 companies and before all this I was £2m up on my bets."

A spokesman for the FSA said the bet, the hedge, and the flotation could all have been an innocent chain of events.

"We are looking into it as a matter of routine," he said. "Spread betting in itself is legitimate, but it isn't if someone is using it to manipulate the market."